OIL: US Crude & Gasoline Stocks Fall Last Week

• RES 3: 97.190 - High May 5 2023
• RES 2: 96.932 - 76.4% of Mar-Nov ‘23 bear leg 
• RES 1: 96.860 - High Apr 07
• PRICE: 96.590 @ 16:29 BST Jul 18
• SUP 1: 95.900 - Low Jan 14  
• SUP 2: 95.760 - Low 14 Nov ‘24
• SUP 3: 95.480 - Low Jan 11 2023 and a major support 

Aussie 3-yr futures traded weaker into last week’s close, but remains off lower levels for now. The recent strength is again challenging resistance at 96.730, the Sep 17 ‘24 high, leaving 96.860 as the next key level. Instead, a continuation lower would strengthen a bearish theme. This would refocus attention on 95.760, the 14 Nov ‘24 low. Conversely, a reversal higher would refocus attention on 96.860, the Apr 7 high.

The local banks on the upcoming Q2 inflation print. Most see headline inflation pressures close to 3%y/y, but this is not expected to be the start of a resurgence in core/underlying inflation pressures, see below for more details. 

Westpac: "Jul 21, q/q, Last: +0.9%, Westpac f/c: +0.6%, RBNZ: +0.5%, Jul 21, y/y, Last: +2.5%, Westpac: +2.8%
We estimate that New Zealand consumer prices rose by 0.6% in the June quarter, boosted by increases in food and energy prices. That would see the annual inflation rate rise to 2.8% (up from 2.5% in the year to March). But while large swings in some specific prices are boosting headline inflation, core
inflation is expected to continue gradually easing, consistent with the softness in discretionary spending." 

BNZ: "• Monthly prices support higher near-term inflation view
• We maintain our 0.8% q/q, 2.9% y/y CPI forecast for Q2
• And 3.0% y/y pick for Q3
• Food, electricity prices rising sharply
• Rent inflation easing" 

ANZ: "Overview: Taking some signal from this week’s Selected Price Indexes, we now expect headline inflation to accelerate to 2.9% y/y in Monday’s CPI release.
However, this isn’t the perfect inflationary storm we saw in 2022 when the economy was overheated: unlike a few years ago, there is now a considerable
degree of spare capacity in the economy that’s expected to keep medium-term inflation contained." 

ASB: "We expect the Q2 CPI to print at 0.6% q/q and 2.8% y/y and for annual inflation to top 3% by Q3. • Our judgement is that the inflation uplift will be short-lived as medium-term inflation dampeners dominate. Forthcoming inflation expectations data will be key.  We also adjudge that the deteriorating global outlook and the large margin of spare capacity will dampen the medium-term outlook for inflation, with the RBNZ to actively provide policy support. We
expect the OCR to be cut by 25bps in August with the possibility of a sub 3% OCR by year end." 

Source: Bloomberg Finance L.P./MNI